House prices are expected to rise as internal borders open and international travel picks up, according to experts interviewed by financial comparison site, Finder.
The RBA Cash Rate Survey Finder reports the opinions of 38 experts and economists on issues relating to the state of the economy.
More than half of those polled believed that reopening the borders would help drive up house prices, with the surge being driven by both homeowners and local investors.
Finder’s head of consumer research, Graham Cooke, said opening international borders and the return of potential foreign investors could revive the market even more.
Sydney is expected to experience significant price growth
Experts have predicted an 8% increase in house prices in Sydney, which would push costs up to more than $ 100,000 by the end of 2022.
Houses are expected to have better price growth compared to apartments in all cities.
Mr Cooke said the average homeowner in Sydney is expected to earn $ 342,306 in 2021 and 2022.
“Sydney homeowners are expected to earn 3.5 times the average household wage of $ 97,211 on their property alone,” Cooke said.
“The Melbournes are way behind, with the average owner earning only 1.6 times the average salary,” he said.
Almost half of those polled believed there had been an increase in banks’ loan cuts due to auction prices higher than their own internal valuation.
Mr Cooke said it was no surprise that banks were skeptical about selling prices.
“It’s an agent’s job to garner as much hype as possible on their listed property,” he said.
“This in turn puts more pressure on Australian borrowers, and banks may be reluctant to take additional risk.
“The dream of owning a home is clearly still alive, but the affordability of housing makes the dream more difficult to achieve,” he said.
Rise in investors, early home buyers excluded from the market
More than half of experts agreed that first-time home buyers were being excluded from the real estate market due to increased investor activity.
According to ABS, Australian investors borrowed $ 9.75 billion in mortgage debt in September this year – the highest level in six years.
June to August was the highest three-month period for the number of investor loans approved in Australia, with 55,680 loans approved.
Mr Cooke said recent events have seen investor interest explode over the past 12 months.
“In 2020, investors were quite cautious about ownership due to a number of pandemic-related policies that made owning rental property unattractive,” he said.
“However, investors have cautiously started to re-enter the market since the moratorium on evictions in most states expired in September of last year.”
Two-thirds of experts estimate that the October-December quarter will see even more loans to investors.